The human genome project, which was completed in 2003, marked a milestone for biotechnology. It opened the door for the creation of hundreds of medicines based on biology, which have improved the outcomes of many acute and chronic diseases.

One of the main winners of this trend is biotech pioneer Amgen (AMGN 1.07%). The company's stock has produced total returns (including dividends and before taxes) of 109,200% in the last 40 years. In comparison, an investment in a vehicle tracking the S&P 500 would have yielded total returns of only 2,600%.

Amgen's success story is legendary in biotech. The company was able to capitalize on the emergence of therapeutic antibodies, which triggered a long-lasting bull market in its stock. No other biotech company has yet to replicate Amgen's extraordinary shareholder returns since its IPO. This is why investors often say "This stock could be the next Amgen" when referring to a stock that could offer unusually high returns on capital.

While reality has never matched the expectation of this often-used phrase, there is one up-and-coming biotech company that really could be the next Amgen.

An open hand holding a light bulb.

Image source: Getty Images.

The next big thing in human medicine

Two decades after we first learned to read the human genome, CRISPR Therapeutics (CRSP -5.15%) is proving we can also successfully edit it. In a watershed moment for genomic medicine, CRISPR and partner Vertex Pharmaceuticals (VRTX -1.21%) secured the first approval ever from the Food and Drug Administration (FDA) for a CRISPR/Cas9 gene-edited product earlier this month. The therapy, known as Casgevy, is indicated for patients with sickle cell disease.

Despite this landmark approval and its potential as a future blockbuster, CRISPR's shares are highly likely to be on the volatile side during the early years of Casgevy's commercial launch. After all, the therapy will likely require Vertex and CRISPR to invest in patient and prescriber education initiatives, and these programs will probably take time to bear fruit. However, this genomic medicine pioneer seems to be walking a nearly identical path as fellow trailblazer Amgen, which bodes well for the long-term performance of its shares.

What's next for the biotech? With its first approval in hand, CRISPR can now focus on accelerating the development of its other pipeline candidates, establishing new partnerships and deepening already established ones, and consider taking bigger clinical risks in high-value settings such as chronic diseases.

Keeping with this theme, the company recently decided to pivot to earlier assets in immuno-oncology to chase a potentially superior clinical profile. Even though this move likely pushed back its commercial debut in cancer by a few years, it's a smart strategy that speaks volumes about management's confidence in the company's platform.

Lastly, the biotech should have plenty of firepower for bolt-on acquisitions as Casgevy's launch ramps. This is an important potential bonus from being the first to market. In effect, CRISPR will likely become cash flow positive before any of its rivals, giving it fuel for value-creating M&A.

The potential of CRISPR

CRISPR screens as a potential long-term winner in the genomic medicine space, and investors who can tolerate short-term volatility should be rewarded handsomely for holding this stock over the next decade or longer. Gene editing is a revolutionary technology that is already disrupting human medicine, and CRISPR is at the forefront of this paradigm shift.